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May 15 | Closing Market Report · Closing Market Report

• cmr260515 - Ag Markets with Mike Zuzolo - farmdoc Projects October ARC/PLC Payments - USTR Posts the Board of Trade will facilitate trade with China - Trump Supports Chinese Farm Ownership and University Students - Ag Weather with Eric Snodgrass Todd Gleason: From the Land Grant University in Urbana-Champaign, Illinois, this is the closing market report for the 15th day of May 2026. I'm Extension's Todd Gleason. Coming up, we will talk about the commodity markets with Mike Zuzolo. He is at GlobalCommResearch.com out of Atchison, Kansas. We will hear some details about the trade negotiations that took place in China over the last several days between President Xi and President Trump, and then we will turn our attention to the weather forecast with Eric Snodgrass from Nutrien Ag Solutions. If you can stay with us for the whole of the program over the next hour, you will also hear all of our commodity week program. If not, it is up online right now in its entirety at willag.org. Our panelists this week included Greg Johnson, Brian Stark, and Chip Nellinger. announcer: Todd Gleason services are made available to WILL by University of Illinois Extension. Todd Gleason: July corn for the day settled at $4.55 and three-quarters, eleven and three-quarters lower. December at $4.81, down ten and a quarter. July beans fifteen and a half lower at $11.77, the settlement price. November new crop at $11.70 and three-quarters for the soybeans, down twelve and three-quarters of a cent. Bean meal a buck eighty higher. Bean oil up twenty-two cents. Soft red winter wheat down seventeen and a quarter to settle at $6.88. The hard red down fourteen and a half. 01:25 - Ag Markets with Mike Zuzolo Todd Gleason: Mike Zuzolo at GlobalCommResearch.com out of Atchison, Kansas, now joins us to take a look at the marketplace. Hi, Mike, thanks for being with us again. Mike Zuzolo: It's great to be with you, Todd. I wish we had better prices to close out this week. Todd Gleason: I wondered about this. The question is, and I have only really seen people talk about this as a correction, so is it a correction or is it just we got to the top and we are in a sideways pattern? Mike Zuzolo: I am inclined to think and agree that this is a correction from a fund community that was hitting multi-year highs in their net longs. The other reason would be that we are still needing to ration demand when it comes to both crude oil and wheat, and they are still running very closely together in their price action. Their fundamentals are still running very closely together. The loss of supply out of the Persian Gulf is still not being met with substitutes yet, so demand rationing is still underway. Clearly, the WASDE report gave me what I wanted out of the hard red wheat crop with both lower acres harvested and also the big decline in the yield, and the big decline in 2025-2026 production and carryover levels globally. We don't have to say as frequently or as loudly, we may be tight here in the United States wheat crop, but we got plenty out there around the world. I don't think that dog will hunt too much, especially after we get past the Northern Hemisphere harvest. I am inclined to think this is a correction wave. The weekly charts are still intact. What would make me change my mind, Todd, is if we didn't snap back relatively quickly, meaning the next week or ten days, and if we saw the Strait of Hormuz open up. The biggest thing I talked about with clients this week to drive the point home to your question was I am getting more and more concerned about the outside markets seeing the high crude translate into a Federal Reserve under new leadership that will go on the hunt to raise interest rates and essentially kill a risk-on type rally in the commodities. I think we are starting to see that bud. It's not conclusive that this is the beginning of the yield rate increase for the rest of the year, but it sure is in the top two factors out there that would make me feel like this correction is more of a sideways move, and we have already topped early in the year like we can do seasonally sometimes. Todd Gleason: You are thinking that Chairman Warsh will raise interest rates? Mike Zuzolo: I think so. Yes, I think so. I think the bond market clearly thinks so. The idea that I read this week coming out of New York and Chicago is that it's going to happen the first of the year. If you look at the two, five, and ten-year bond yields, they are hitting multi-month highs in some cases. They are getting close to levels that would be, I think, pretty punitive and damaging to the economy and to investment. What I am really watching is the 5% level in the ten-year note. That seems to be, on my analysis and what I looked at on the research side, when I compare interest rates and commodities as a whole in totality, that 5% is a big number. If you go above it, and I do think one thing we can say also about this week is this was a wide-ranging correction or wide-ranging sell-off in the commodity space, and that included livestock earlier in the week. It does smell, look, and feel like the funds, seeing the wheat down 3% on Friday, the corn down 2.6% on Friday. Possibly the commodity that has the most uncertain and potentially worsening demand fundamentals, the soybeans, actually finding support from the crush report and finding some support from some Italian soy meal purchases. That too would suggest to me that this market is not running on a top-bottom type mindset. Todd Gleason: Your suggestion, I think, is that the funds took profits at this point widespread across a lot of the agricultural and other commodities, and that the underlying support remains there for a move to at least go sideways to higher then? Mike Zuzolo: That's right. I will put it to you in this frame of mind very briefly on a daily lead month continuation chart. If you look at crude oil, we made a low of $88.66 in WTI back on the sixth, so essentially nine days ago, and now we are back up to $105, $106. We are back up near the highs of the month of May and making new highs in the month of May, close to it. I think that's what I am going to look for next week and into the second week, the last week of the month of May here, to see if the wheat market doesn't do a similar type price action. Todd Gleason: What did you garner from the Trump-Xi meetings this week in Beijing? Anything of importance? Mike Zuzolo: I would say that it met my expectations that it was a different President Xi versus the first term. He was not conciliatory; he was much more rudimentary, much more in your face as a power that was equal to the United States, and he was much more pressing on Taiwan. It would look like to me it's going to be difficult to garner the same type of trade relationship that we had back in the first term. Having said that, I was very pleased to see that the Chinese Ministry did go ahead and renew export licenses for US beef imports and plants. I think it numbered about 400 licenses, so that was a really big piece of news for the cattle industry because that was a big mini-crisis coming out of the meeting where they had initiated it, then they canceled it. As of Friday the close, they have initiated it in a wide scale now. Maybe we will get some good news next week and the details aren't out yet. Todd Gleason: I want to come to your home there. What were the temperatures like today, and how dry is it? Mike Zuzolo: It's really starting to be impactful. We are going to break 90 degrees. It's a few degrees higher both yesterday and today than what we were expecting on the forecasts. I think that's the other part of the shoe that could drop here next week is if we don't get the rains that maybe some think we will in terms of saving the wheat crop. I think it's done. I think after next week with this heat coming in, I think Garden City is going to be around 94, and I think you get down into Colby, they are probably going to break 90 as well. I think the wheat crop is pretty much done. That K-State and Kansas wheat tour projecting about 20% abandonment matched up really nicely with what you and I have been talking about. Todd Gleason: Abandoned and replaced with anything? Mike Zuzolo: It could be. This is where it's going to be spotty, but if we get the rains this weekend, I think replaced with beans, replaced with hay. Pasture conditions are starting to really be talked about by my cattlemen right now. Todd Gleason: All right. Thanks so much. I appreciate it, Mike. Mike Zuzolo: Thanks, Todd. Take care. Todd Gleason: Mike Zuzolo is with GlobalCommResearch.com. He is in Atchison, Kansas. 08:54 - farmdoc Projects October ARC/PLC Payments Todd Gleason: In today's agricultural news, the agricultural economists at the University of Illinois have used the just-released average county yields to estimate the 2025 ARC and PLC payments. Those will be delivered to farmers by the USDA in October. The farmdoc team estimates corn producers across the nation will on average receive $58 an acre. There will be larger payments in the Mid-Atlantic and Northeast states, along with parts of Iowa, southern Minnesota, and the Pacific Northwest. The average soybean payment is modeled at $29 an acre. Again, with larger payments in the Mid-Atlantic and Northeast regions, and for soybeans in parts of the Upper Plains. The projected nationwide average wheat payment is $47 an acre. The corn and soybean payments are based on enrollment in the ARC program. The wheat acres would be covered by PLC. You may read more and find maps with projected payments by county on the farmdoc daily website at farmdocdaily.illinois.edu, or look on willag.org. 09:58 - USTR Posts the Board of Trade will facilitate trade with China Todd Gleason: The Office of the US Trade Representative posted to X today about trade with China. It wrote the Board of Trade will facilitate mutually beneficial trade between the two largest economies in the world, and included a sound bite with Trade Representative Jamieson Greer. Jamieson Greer: What we intend to do on the US side is put out a call for public comment first and foremost, saying we are trying to manage this trade with China. We want to focus on non-sensitive goods. We think we should be selling them. Things we think we should be buying from them. Trying to facilitate trade in that area, and then we will, from there, be able to interact with our Chinese colleagues and negotiate with them over where we think we have the strongest mutually beneficial trade with our countries. Todd Gleason: The Board of Trade, by the way, in this case is not the Chicago Board of Trade, the CME Group, or any free trade exchange for that matter. USTR, under the Trump administration, has been discussing the creation of a Board of Trade framed as a government-to-government mechanism to manage bilateral commerce in non-sensitive goods. Think agricultural products like corn, soybeans, and wheat. The Economic Times this week reported the Board of Trade concept was first broached by Greer in March as a primary deliverable for the US-China summit. The mechanism aims to facilitate a $30 billion managed trade agreement. The way the board would work remains unclear. However, the Economic Times writes Washington is no longer demanding that Beijing change its state-directed, export-driven economic model to become more like the US consumer-driven, market-oriented model. It sounds vaguely like the first Trump administration's phase one trade deal with China, which established dollar-value targets for imports rather than volume commitments. 11:49 - Trump Supports Chinese Farm Ownership and University Students Todd Gleason: Let's stay with the Trump administration. Fox News' Sean Hannity asked the president a question about China buying US farmland yesterday, which the president addressed and then went on to discuss Chinese students attending US universities. Here is a portion of the exchange. Sean Hannity: I would assume, I'm in Beijing, if I wanted to buy property near one of their military installations, I don't think President Xi... Donald Trump: No, they wouldn't let you. It's not that I love it. Do you want to see farm prices drop? Do you want to see farmers lose a lot of money? Just take that out of the market. But they have had a lot of land for a long time. Obama did nothing about it. They bought a lot of it during the Obama administration. He did nothing about it. As far as the students, it's 500,000 students. They come, good students. I could tell them, I don't want any students. It's a very insulting thing to say to a country. They would then immediately go out and start building universities all over China. But if you don't have those students, good students by the way, if you don't, and we do another thing. If they are good and they want to stay in America, we won't give them a green card and things like that. Not only them, but other countries. But if you want to see a university system die, take a half a million people out of it. Todd Gleason: That was President Donald Trump on Fox yesterday expressing his support for Chinese nationals continuing to have the ability to purchase US farmland and for Chinese students to attend US universities. 13:47 - Ag Weather with Eric Snodgrass Todd Gleason: Let's turn our attention now to the weather forecast. We are joined by Eric Snodgrass at Nutrien Ag Solutions. As usual on a Friday, hello, thanks for being with us again, Eric. Eric Snodgrass: Thanks for having me on. Todd Gleason: I saw something on one of the feeds, this one on X or Twitter, about a pickup truck. It said my pickup truck is parked here and there's five inches of airborne dust now around the wheel. Unbelievable. Where did that happen? Eric Snodgrass: The setup was May came in very dry from the Pacific Northwest, through the Northern Plains, through the Western Corn Belt, and even the Upper Midwest. While we had moisture here, just to our west and north, it's been extremely dry in the month of May. What's interesting is Iowa came off one of their wettest Marches and Aprils on record, now to having an extremely dry start to May. So there's been a lot of dry weather to our north and west. That all started to break down earlier this week. A deep trough cut into the Northwest, kicked off a big severe weather day in parts of Utah, Idaho, and Montana, and that started a dust storm. As the low curled up into Canada, where it's still very cold right now, they have not broken away from their wintertime weather just yet. To the south of it, just this large plume of dust was picked up. It stretched from Central Montana all the way through the Red River Valley of the North. That truck you saw was in North Dakota. Yes, the visibility was probably down to about ten feet, and there was so much blowing dirt and dust that it was piling up like snowdrifts up against the tires of that guy's truck. So very, very strong winds hitting the Northern Plains, and this is going to do it again today where they have red flag warnings that stretch from Central Montana all the way to the UP of Michigan. Todd Gleason: We had a little rainfall this morning. It came with a lot of lightning. About half an inch, I think, here. Do we have severe weather coming our way? Are we going to get the rain that they have had, and does that come with severe weather this week at all? Eric Snodgrass: Today, the threat is in Iowa. Then on Saturday and Sunday, we are going to be watching more of the Western Corn Belt, but it's going to start to press east. So we have these chances of storms working their way across our neck of the woods. The reality is over the next seven days, as the Bermuda High returns into the Southeast, we are going to have a narrow stream of Gulf moisture that's going to stretch from Eastern Texas to the Great Lakes. That puts most of Illinois under a high probability in the next seven to nine days of getting another inch plus of rainfall. If you are caught in one of these storms, you are going to get even more than that. So widespread at least an inch of rainfall coming across the Midwest. The issue is on either side of that, like where we just got that terrible report from the winter wheat belt, and over in the Southeast, they are going back over very dry in this particular pattern. Todd Gleason: Let's continue on that path. Where does drought remain, and is it drought, and is it worrisome? Eric Snodgrass: I was just talking yesterday with a colleague of mine at Lincoln, Nebraska. He's a contributor to the Drought Monitor. He put in a recommendation for a major upgrade to their drought. They have got nearly the entire state, 90% of Nebraska, is under some form of drought with a huge chunk of it under severe to extreme and exceptional drought. That's one side of it, that's the Western Corn Belt. Then you have east, we are still dealing with dry conditions in Kentucky and Tennessee, we are still dry in the Southeast, very dry in the Southeast. But we are out of drought here, and with all the rain coming through, we are likely going to stay that way for a while. The problem is, Todd, we still have planting left to do, and you are going to be dodging storms for the next week until we talk next Friday, when I see a little bit more of an open pattern into that week two timeframe. That's the near-term situation. You mentioned drought, just want to point out that the new seasonal drought outlook from the Climate Prediction Center all the way through July has most of the Western United States building in drought, and also the Plains that are in drought not breaking away from it. So that's a major concern as we get closer and closer to summer. Todd Gleason: What do you think about the summer forecast? I'm going to have to ask you. Eric Snodgrass: There's a few things I have been doing, Todd. Whether I look at the El Niño, which is still on track to being historic, in fact, it is the fastest-developing El Niño we have had on record. There's a lot of reason to think it could be over three degrees Celsius, which would be a new record setter in terms of strength. So we have that. We have what could potentially be a very active hurricane season in the East Pacific, not the Atlantic, but in the East Pacific. You look at how warm the ocean temperatures are across most of the Pacific, and I'll be honest with you, Todd, it tells me heat is going to be west. It tells me that ridging is going to be west for summer. It tells me that we will likely get northwest flow over us and thunderstorms, which tends to not be hot and tends to not be a bad thing for our yields. But, and this is a huge but, Todd, the butt here is this weather pattern we have been trying to diagnose even in this month of May, our ability to properly pin down even the end of the next ten to fifteen days has been terrible. Models have been all over the place, model skill is low. So I have no confidence that we are properly predicting the summer pattern right now. There's information in that. It's like, hey, we need to take a steady hand with this, we need to understand that base hits are going to win, not swinging for the fences based on a forecast. I'm very unsettled with my summer forecast right now. I think the next month will tell me a lot. Todd Gleason: Thanks much. We'll talk with you again next week. Eric Snodgrass: Sounds good. Thanks, Todd. Todd Gleason: Eric Snodgrass is with Nutrien Ag Solutions, helping us to wrap up this edition of the closing market report for a Friday afternoon.